Compute and make the new graph of marginal cost if workers

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Helen makes cheesecakes using equipment that she rents for $30 and cheese and butter that cost $4.55 a cake.  She hires workers and finds that they produce according to the following schedule:

Cheesecakes

Total hours

1

0.1

2

0.25

3

0.475

4

0.8125

5

1.31875

6

2.078125

7

3.217188

8

4.925781

Workers are paid $10/hour.

a. Using a spreadsheet, calculate and graph the marginal cost of each cheesecake. Why does the MC curve have the slope (up, down, or flat) that it does?

b. Calculate and make a new graph giving the marginal cost of each cheesecake if workers become 25% more productive, that is to say, if each cake can be made with only 75% as much labor. Calculate and make a new graph of the marginal cost if workers get a raise to $15/hour, with the old productivity.

Reference no: EM13393120

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